Bill Burnham

Valuing Google Based on 'True' Free Cash Flow

Not sure why you would back out stock comp from free cash flow if you are trying to get a true sense of the operating cash flow. Stock comp is a theoretical, non-cash charge that is not related to operating performance. If you are trying to get a sense of operating performance you should definitely leave stock comp in the cash flows, not take it out. At the very least if you are going to take it out then you have to back out the tax benefits of it as well to be consistent.